Most of the time, after separation, assets get split between the ex-spouses. But what happens to the car that was bought collectively by the then-husband and wife? Does only one person drive it when there are two names on the title? Wondering how you can get your name off the car loan after divorce? Read this blog further to know in detail.
How Can I Get My Name Off A Car Loan After Divorce
Even if you do not possess the car that was co-borrowed by you and your ex-spouse co-borrowed, it may still influence your credit score. It is because if your ex-partner, who is currently using the vehicle, misses a single payment, it will directly ruin your credit score and theirs as well. Even if the divorce papers consider the spouse responsible, it doesn’t matter because there are two names on the car’s title and the auto loan. The same custom is applicable when it comes to default possession and repossession. You both will face a drastic decrease in your credit scores.
However, you can take off your name from the car’s title and the loan as well. It is possible through the refinancing process. Refinancing allows you to transfer the possession to either one of the partners by making them the sole owner.
Refinancing the car is the only possible method to remove a co-borrower from a car loan. However, for this purpose, your ex-spouse must fulfill all the required qualifications.
Qualifying for Refinancing
To evaluate whether your ex is eligible to refinance an auto loan and help you remove your name from the title, you need to look out for a few things. Auto loan lenders require varying qualifications, but we have handpicked a few basic ones.
- There must be equity in the vehicle
- The original auto loan must be a year old
- The car’s mileage must be less than 100 000 miles
- The vehicle must not be older than 10 years.
If the car fits this criterion, then your ex-partner can succeed in getting the car refinanced and thus help you remove your name from the car’s title.
Besides the car requirements, some income requirements also need to be filled. If the ex-spouse doesn’t make monthly payments timely, you will be unable to cut out your name.
Changing the Loan Terms
Refinancing means replacing the original auto loan with a new one. The vehicle remains the same, but the loan amount, interest rate, and loan period may change. People usually opt for refinancing to pay reduced monthly car payments. They do so by getting a loan with a better interest rate or stretching out the loan period. Through refinancing, your ex will be able to remove your name from the title and get a manageable loan by adjusting the monthly payment routine as well.
The good news is that if your ex’s credit score has gotten better since you both have taken out the loan, then they may get a low-interest rate loan instantly. Refinancing is a lifesaver when it comes to reducing interest charges throughout the loan period.
Another alternate way to refinance your car is by stretching out the loan’s original length. Extending a loan is not ideal when aiming to save up throughout the loan. But it helps in lowering each month’s car payment.
Your ex-spouse has the option to refinance through both means. Through this strategy, they will succeed in removing your name from the car’s title, lower the monthly car payments and thus afford the car on their own.
Getting Another Car After Divorce
It’s clear that after separations, credit scores hit rock bottom because finances tend to split. Besides, divorce matters cost a fortune as well. There is a possibility that you may end up without a vehicle. And a bad credit score would make it even harder to get new transportation. But nothing is impossible with CarLoanRefinancing. With our able lenders, you will get a new vehicle within less than a week!
If you are searching to take out a new auto loan, then contact us. At CarLoanRefinancing, we are partnered up with a competent network of dealerships throughout the nation. We will help you find the ideal auto loan that will leave you with no regrets.